Sounds good to us. Get the D40.
My friend loves his, but he always tells me that he wants to buy a better camera because he likes my photos more. *shakes head*
Tell him to take a photography class and buy my Wii instead of getting a new camera. That would solve everyone's problems.
I wanted to really thank everyone who commented in this thread... very helpful discussion and suggestions that probably saved me from buying the wrong camera (I would have certainly ended up getting either a "nice" point and shoot/"bridge" camera without your prodding).